Buy SBI Life Insurance; target of Rs 1350: ICICI Direct

ICICI Direct's research report on SBI Life Insurance

SBI Life (SBIL) is among the most dominant players in the Indian life insurance industry with strong distribution network, parentage, operating metrics. Balanced product mix with focus on opex ratio ahead of industry • Strong parentage led distribution remains key. Premium accretion slower than expected • Gross premium growth slower at 14% YoY; NBP growth up 21%, led by tax amendment • VNB margins steady at 30.1%, aided by balanced product mix • Surplus at Rs 1942 crore; focus on cost and decline in claims led PAT growth at 16% YoY to Rs 777 crore • AUM growth decent at 16% YoY to Rs 307340 crore.

Outlook

We retain our BUY rating on the stock. We broadly maintain our EV estimates for FY24-25E. We upgrade out target price for SBIL from Rs 1300 to Rs 1350, valuing the stock at 2.2x FY25E EV.